The market for stocks of quantum computing companies experienced a notable boom in October, capturing the attention of investors. However, so far in November, the trend has reversed dramatically.
Various companies in the sector have seen their share price plummet, raising questions about the sustainability of this technology in the short term and whether this correction marks the end of a speculative euphoria.
The concern about the setback is palpable, to the point that the financial information service Perplexity Finance he wonders If this is a collapse similar to that of the “dotcoms” at the beginning of the century.
According to the firm, investors now face “the fundamental reality: sales multiples of 200 to 900 times, zero profits, mounting losses, and business profitability that will still take at least 15 to 30 years to achieve.” This reset of expectations has meant a combined loss of more than $30 billion in market capitalization that evaporated from the mid-October highs.
Specialized companies register pronounced declines. For example, Rigetti Computing fell 54%, D-Wave Quantum 46% and Quantum Computing 53%, in the last month after some hitting all-time highs in October.
Only IBM briefly interrupted the trend this week by launch the processor Quantum Nighthawk, with more than 120 qubits and 218 adjustable couplers that allow 30% more complex circuits. Still, IBM shares fell from $342 to $306 in trading on Friday.
The perfect storm and the fear of stagflation
Trader David Battaglia describe that there is a “perfect storm” in the market. «We see signs that do not fit the traditional narrative. “This is not a simple correction,” he says. According to the analyst, if this dynamic were a normal process of risk aversion, money would flee to bonds, lowering their yield, but the opposite is being seen. “The market is selling everything,” he says.
Stocks, bitcoin (BTC) and bonds are falling at the same time, which is unusual, he explains. The real “fear” is not a recession, but stagflation (high prices without growth), since the market does not believe that inflation in the United States will go down, he says. According to the CriptoNoticias Calculator, bitcoin is at $96,000 at the time of this publication.
If no one buys government bonds due to inflation, the only way out for the United States Federal Reserve (FED) will be to devalue the dollar, he explains. That is why Battaglia concludes with the recommendation that “buying cheap or in decline is like sowing before it rains.”
Future projections for quantum computing
Despite the recent collapse, Bank of America has a optimistic view long term on quantum computing. The entity predicts that this market will reach a value of approximately 4,000 million dollars in 2030up from an estimated 300 million in 2024. The analysts, led by Wamsi Mohan, wrote: “While the promise of quantum computing is real, there are technological obstacles to its scalability that are currently being addressed.”
“We expect increasing penetration and relatively stable pricing during the early stages of adoption. Once this technology is consolidated at scale and standardized, we could see a significant increase in revenue,” Mohan said.
For his part, analyst Willy Woo revealed that a former researcher in Google’s innovative projects division told him that the company’s senior developers are “skeptical of quantum computing, but do not have enough knowledge of the field to adequately assess the risks,” he says.